The Sky is Falling The Sky is Falling
When things are going well and prices are high, investors rush to buy, forgetting all prudence. Then, when there’s chaos all around and assets are on the bargain counter, they lose all willingness to bear risk and rush to sell. And it will ever be so.
~Howard Marks
(Chart Source: Charles Schwab)
Stocks are just as much about the financials and prospects of future financial success, as it is the story line that shareholders and prospective shareholders have. If Teva’s (TEVA) storyline is deemed by most to be fire and brimstone, or an asteroid headed for earth; people will jump out of the stock like a burning building. Identifying the current chapter of the story, and then trying to understand the entire story of the company, and what future chapters will read, is literally the metaphorical modus operandi of financial markets and the rise and fall of equities and other financial instruments. One chapter, we bite our nails wondering if our hero/heroine will survive the trials and tribulations they face, and the next chapter we take pride in our hero/heroine beating the bad guy and saving someone or something from utter devastation.
